HRA exemption calculator 2026-27: now 50% in eight cities

The rule

Under the old regime, the tax-free part of HRA is the lowest of three amounts for the period you paid rent:

the HRA you actually received;
rent paid minus 10% of your salary;
50% of salary if you live in one of the listed cities, 40% anywhere else.

Salary here means basic pay plus dearness allowance, not your gross pay.

Eight cities from tax year 2026-27

The Income-tax Rules, 2026, which came in with the new Income-tax Act from 1 April 2026, added Bengaluru, Hyderabad, Pune and Ahmedabad to Delhi, Mumbai, Kolkata and Chennai for the 50% limit. Returns for 2025-26, filed in 2026, still use the four-city rule.

New regime

HRA gets no exemption in the new regime. Check whether the old regime still wins for you in the income tax calculator; put the exemption from here into its HRA box.

Proof

Keep rent receipts and the rent agreement. If your rent is more than ₹1 lakh a year, your employer needs your landlord's PAN. The new rules also ask you to state if the landlord is a relative.

Guides

HRA: Bengaluru, Hyderabad, Pune and Ahmedabad now get the 50% limit

Questions

Can I claim HRA if I pay rent to my parents?

Yes, if you really pay the rent, there is an agreement, and your parents show the rent as their income. The new rules ask you to disclose that the landlord is a relative.

Is Bengaluru a metro for HRA now?

Yes, from tax year 2026-27 (April 2026 to March 2027). For 2025-26 it was still 40%.

What if I do not get HRA from my employer?

Then there is no HRA to exempt. Under the old regime you may be able to claim a deduction for rent instead, within tighter limits.

Sources

For illustration only, for the old tax regime. It is not tax advice. Check with your employer or a chartered accountant before you file.